HEW property owner plans another run at development
May 23, 2018
The sheer volume of graffiti, broken glass and other damage would lead any visitor who ventures into the multi-winged maze of buildings on Willow Valley Road to believe they have been vacant for decades.
But the historic hospital, most recently the site of Nevada County Health, Education and Welfare, has only been vacant for about six years.
"I think everyone in Nevada County has (trespassed) in here," owner Bill Litchfield said ruefully on a recent tour of the grounds.
Crews were busy cleaning up, trimming trees and bushes and raking up debris to protect against fire danger. Inside, the building is trashed with graffiti and glass everywhere and holes in the walls and ceilings.
"It's a mess," Litchfield said, adding that the building had been left open when he purchased it in 2011. "It's a shame."
Litchfield said the last time he proposed a development for the 12-acre site, it never got past opposition from the neighbors and lack of support from Nevada City officials.
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But he is ready to move forward once again, with a proposal that would convert the decrepit existing building — some parts of which date back to 1860 — into 34 affordable-housing units, ringed by seven high-end 12-plexes. In all, Litchfield wants to create 120 units — quite a few more than the 32-home limit asked for by the Nevada Street/Willow Valley Area Neighborhood Association.
The property was once the site of a hospital that was in operation from 1856 until 1975. The west wing was built in about 1880 and the east wing was built around 1920.
"The hospital was started as a private hospital in 1856, before most of the Nevada City we know today existed," Litchfield said. "The oldest part of the building is so old that it predates Willow Valley Road, all of the neighborhood and most, if not all, of existing Nevada City."
In the 1980s, the county began using the building to house low-risk inmates from the overcrowded old jail and later used the building to host the Behavioral Health Department and other offices.
The building was, infamously, the site of a mass shooting on Jan. 10, 2001, when Scott Thorpe, a 40-year-old Behavioral Health Department client, killed Laura Wilcox and Pearlie Mae Feldman and injured Judith Edzards. Thorpe then shot and killed Michael Markle at Lyon's restaurant on Nevada City Highway (now Lumberjack's).
The county vacated the HEW building in 2006, citing deteriorating structural conditions. The following year, a consultant found that to demolish the complex would cost $2.25 million. To renovate the buildings filled with mold, asbestos and lead paint for county offices would cost $13.8 million, the report said.
In 2011, Litchfield bought the property for $95,000, in large part due to the high costs associated with development. According to Litchfield, his proposal to Nevada County to purchase the property was accepted on the promise he would provide housing, preferably "workforce" housing.
But, he said, as soon as he began development discussions with Nevada City, the city began to back-track.
Litchfield said that the negotiations did get close to the preferred density based on "senior" housing, which has less traffic — but he wanted a mix of family and senior housing.
He made a proposal to the neighborhood for 100 units of multi-family housing on the site, noting that Nevada City's R3 zoning allows for up to 16 units per acre (195 units).
"I was proposing about half of that, providing a restoration and re-use of the historical building and meeting the 30 percent affordable housing requirement," he said.
According to the developer, he tried to make a 32-unit development financially feasible, but found that would work only with a very, very high-end townhouse with an average cost of $1.4 million. Litchfield said he also explored an assisted living development, an acute care facility, a mid-size digital children's and educational movie production company/facility, co-housing and senior housing projects.
"The neighbors have consistently said they will oppose any commercial use," Litchfield said.
After five and a half years, he said, he is right back at square one. Actually, he now needs not just the original 100 units proposed, but an additional 20 due to the intervening years of building cost inflation.
"I just have to make a stand here or there is no way to develop this property and preserve a part of our local history," Litchfield said. "I'm not good with the politics. I'm a good builder."
The plan for development
Litchfield said he has had significant challenges in developing the HEW property. For one, Nevada City has one of the highest inclusionary housing requirements in California. If Nevada City annexes the property, which it is expected to do, any residential development will have to provide 30 percent of the units as "affordable." Often, affordable housing is built with government grants or subsidies, but Litchfield said that does not seem to be a likely possibility at this time.
"There is not enough profit in new market-rate housing to make up for the subsidy on the affordable ones unless you can build many, many units," he said.
And while the neighborhood association has come out in favor of demolishing the existing building, Litchfield says he is committed to saving it as part of Nevada County's history.
That building is about 40,000 square feet in two- and three-story wings. Litchfield said its size and style dictated the design decision for multi-story 12-plexes.
"The saving grace is, you really won't see them from the road — and it gives me the density I need," Litchfield said.
He says the 12 units per building likely will be condos and will be higher-end. He envisions them as ranging from two to four bedrooms and 1,100 to 2,300 square feet, costing from $450,000 to $800,000.
"Our research says there is a market for that," Litchfield said. "As people age, they no longer want to take care of 10 acres and a 4,000-square-foot house. Here, they'll get the maintenance taken care of, maybe even maid service."
The existing building would be converted into 34 affordable-housing units, most coming in at about 1,200 square feet.
"They will still have the high ceilings and lots of windows that are original to the building," Litchfield said. "They'll be nice, but not luxurious."
Litchfield knows he won't sell all 120 units in a year. The plan probably would be to renovate one of the wings, then build one of the 12-plexes and sell it out, and so on. There are not a lot of grading needs, and the building is structurally sound, he said, adding that he would like to start next year and take several years to build out the project.
"I wish I could compromise (on the size) but I'm stuck," he said. "I can't reduce it and have it work. I'm going to push forward and see what we can get done."
To contact reporter Liz Kellar, email email@example.com or call 530-477-4236.
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